Fourth and long on federal surface transportation funding…again

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

When it comes to this situation, there are a few constants:
-the federal gasoline tax, which serves the main funding mechanism for the Highway Trust Fund (HTF), whose funds are allocated for federal highway, transit, and highway safety programs, has not been increased since 1993;
-there has not been a long-term federal surface transportation bill since SAFETEA-LU expired in September 2009;
-the HTF continues to pay out more than it receives; and
-in recent weeks, Congress continues to predictably let down its constituents with its petulant “draw a line in the sand” stances on how to make the situation better (it feels more like sandlot football than professional football, to be honest, but at least they are off on a “well-deserved” recess for the next five weeks)

So, where does all that leave us? Back where it all started, it would seem.

The good thing is that federal surface transportation funding remains intact for the next ten months, and the bad thing, of course, is that all the same challenges pertaining how to more adequately fund surface transportation projects and move forward on a long-term bill remain where they just about always are these days, in a fourth and long situation, with no hope for a first down.

As previously reported, the bill signed off on by Congress, the Highway Transportation and Funding Act of 2014, has language pointing out what has been apparent for more than a while: the existing Highway Trust Fund system is unsustainable and unable to meet our Nation’s 21st century transportation needs, and also notes that Congress should enact and the President should sign a surface transportation reauthorization.

That is all good and well, but the fact remains that the federal gasoline tax has not been increased since 1993. That is a long time and at the end of the day it is unacceptable. The notion of raising the tax and indexing it to inflation, which has been proposed by various non-Congressional stakeholders, is apparently too reckless and a non-starter. Really?

Instead, the Highway Transportation and Funding Act of 2014 turns to other potential revenue sources, including: extend pension smoothing relief that was enacted in 2012 as part of the MAP-21 legislation and would allow employers to continue to use historic interest rate averages to calculate their pension contributions, which is estimated to raise $6.4 billion over ten years; transferring $1 billion from the Leaking Underground Storage Fund (which addresses petroleum releases from federally regulated underground storage tanks) into the HTF, which would have no revenue effect; and require the Secretary of Transportation to charge and collect a fee of .3464 percent ad valoreum on merchandise formally entered or released into the U.S, which would raise an estimated $3.5 billion.

Are these measures what is really going to save the day? It looks like we will have to wait and see. The Senate wanted a shorter bill through December, with the hope that it could then begin work on a multi-year bill. The House balked on that, preferring the ten-month bill to secure funding into 2015.

This was essentially premeditated on both sides, as The Hill reported prior to the Senate vote that House Speaker John Boehner (R-Ohio) said he “wouldn’t accept the Senate’s changes, and would simply strip them out and send another bill back to the Senate.” This latest round of political tension comes at a time when the Department of Transportation has said that beginning today, August 1, it would have had to start to cut payments to state and local governments for road and transit projects by as much as 28 percent if Congress did not take quick action, the report added.

This whole thing brings the saying, “it would be funny if it weren’t so sad” to a new level in a way. As Congress waits for the White House to formally sign this bill, fights are being fought and turf is being protected in Washington, while the game continues to remain deadlocked and it is always fourth down.

August 18, 2014

About the Author

Jeff Berman, Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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